Question & AnswerQ&A (Republic Act No. 8751)
The main purpose of Republic Act No. 8751 is to strengthen the mechanisms for imposing countervailing duties on imported subsidized products to protect domestic industries from unfair trade competition.
The Secretary of Trade and Industry, for non-agricultural products, and the Secretary of Agriculture, for agricultural products, are authorized to impose countervailing duties upon determination by the Tariff Commission.
A countervailing duty may be imposed when an imported product receives a specific subsidy from its country of origin or exportation, and such subsidized import causes or threatens material injury to a domestic industry, or materially retards growth or establishment of a domestic industry.
A petition must include the domestic industry affected, details on employment, capital, production, known importers or exporters, estimated subsidy, and other necessary particulars justifying the duty imposition.
The petition must be supported by domestic producers whose collective output constitutes more than 50% of the total production of the like product; however, investigations only begin if supporters represent at least 25% of production.
Upon receipt of a petition, the Secretary of Trade and Industry or Agriculture must notify the Secretary of Finance, who then informs the Commissioner of Customs to secure import entries and to collect reports on the allegedly subsidized products.
The Secretary may impose a provisional countervailing duty in the form of a cash bond equal to the estimated subsidy amount, which must be posted not earlier than 60 days from investigation initiation, and held for up to four months.
A subsidy exists if there is a financial contribution by the government or public body that confers a benefit to producers or exporters, such as direct funds, tax exemptions, provision of goods or services, income support, or other financial contributions.
Material injury involves significant volume or price impact from subsidized imports, affecting output, sales, market share, profits, employment, and other economic factors detrimental to the domestic industry.
Countervailing duties shall generally remain in force only as long as necessary but shall not exceed five years from imposition unless reviewed and extended based on the risk of recurrence of subsidization and injury.
Interested parties include exporters, foreign producers, importers, governments of exporting countries, trade associations, domestic producers of like products, and labor unions representing the industry.
An adversely affected party may file a petition for review with the Court of Tax Appeals within 30 days of receiving notice of the countervailing duty order, though this does not suspend duty imposition.
Voluntary undertakings allow exporters or governments to revise prices or eliminate subsidies, potentially leading to suspension or termination of investigations if the Commission accepts such offers.
Upon receiving the case records, the Commission starts a summary formal investigation, publishes notice, notifies interested parties, determines subsidy, injury, and causal link, and submits findings within 120 days.
Cumulation allows the Secretary or Commission to assess the combined effects of imported products from multiple countries if subsidization and import volume from each country are above negligible levels and if cumulative effects are warranted by competitive conditions.